Do Interns Get Paid: Your Rights and Compensation [US Guide]

The short answer to the “Do interns get paid?” question is: it depends. Many internships in the United States are paid, but unpaid internships are also legal if they meet the criteria under the Fair Labor Standards Act (FLSA).

In this article, we’ll compare paid and unpaid internships, examine federal and state laws governing them, and see how interns can get paid. We’ll also go through practical strategies that can help you get paid as an intern, so let’s get started.

Key Takeaways

• Most interns in the U.S. get paid, but unpaid internships are also legal if they pass the test created by the FLSA.
• The amount interns make depends on the industry and the company, with hourly rates ranging from $8.89 to $24.28 for paid interns and from $10.10 to $34.13 for student interns.
• A common method of paying interns is with an hourly wage, though some interns receive salaries.
• Unpaid interns can receive stipends, which are typically smaller than wages and meant to offset basic living expenses.

Do Interns in the US Get Paid?

Interns in the U.S. can get paid in various ways, including hourly wages, fixed salaries, and stipends. In many industries, especially for-profit ones, paid internships are the norm.

However, unpaid internships exist and are legal if they meet certain criteria. The Department of Labor has established a test for unpaid interns and students under the FLSA. Employers can use it to determine whether an intern is considered an employee (and entitled to compensation) or not.

When it comes to paid internships, a typical intern's salary in the United States is $17.04 an hour. The rates vary significantly between companies and industries, ranging from a minimum wage for interns of $8.89 to a maximum of $24.28 per hour.

Some of the highest hourly wages for interns are in California and Virginia, and in industries like aerospace engineering, civil engineering, and cybersecurity.

Student internships have a slightly higher average of $18.84 per hour. The hourly rates are also higher, going from $10.10 to $34.13. California and Virginia are also topping the lists when it comes to high hourly wages for student internships. Industries and positions that pay the most include product management and finance.

On the other hand, stipends represent fixed amounts provided to interns, regardless of their hours. Their main goal is not to provide substantial monetary compensation but to cover some of the basic living expenses. Typically, stipends are intended to cover an intern’s housing, food, and transportation expenses.

Paid vs. Unpaid Internship

While financial compensation is the primary distinguishing factor between a paid and an unpaid internship, many other related factors influence a candidate’s decision to apply.

A paid internship enables aspiring professionals to earn a salary while gaining invaluable work experience. Since fewer students and aspiring professionals can afford an unpaid internship, the pool of candidates applying for paid ones is usually much larger.

As a result, it’s often much easier to get an unpaid internship. This can help you jump-start your career, put your theoretical knowledge into practice, and start leveraging networking sooner than interns looking for paid opportunities.

On the other hand, paid interns are considered employees and, as such, are protected by labor laws. Unpaid interns can receive stipends to cover their basic living expenses.

The criteria for unpaid internships are also much stricter than those for paid positions. The primary purpose of an unpaid internship needs to be education. If the employer becomes the main beneficiary of the intern’s work, they should be paid.

Lastly, unpaid interns often have more flexibility in their obligations. Since paid interns are considered employees, they will have set tasks and work hours which employers will expect them to complete. Unpaid interns have a supplementary role, allowing them to focus more on learning.

Here’s a table outlining the core differences between paid and unpaid internships:

Federal and State Laws Governing Internship Pay

The primary federal law that governs internship pay is the Fair Labor Standards Act (FLSA). It governs aspects like minimum wage and overtime pay, but it also requires for-profit companies to pay employees for their work. However, there are certain instances in which the FLSA doesn’t classify interns as employees, allowing for unpaid internships.

The FLSA devised a robust test for unpaid interns and students. The test looks at seven distinct aspects to help determine who is the primary beneficiary of an internship.

The test examines the following factors:

• Whether both the employer and the intern clearly understand that there is no expectation of compensation.

• Whether the internships provide the experience and training similar to that of an educational environment.

• The relation of the internship to the intern’s formal education program.

• Whether the internship allows the intern to continue their studies in the current academic year.

• Whether the duration of the internship is limited enough to provide the intern with sufficient knowledge.

• If the intern’s work doesn’t replace that of a paid employee, but instead complements the team.

• Whether there is an understanding between the employer and the intern that there is no guarantee of a job offer at the end of the internship.

It’s important to note that there is no definitive set of answers to these questions. The test is flexible, enabling relevant authorities to assess each company and intern individually and value different factors depending on the circumstances.

Apart from that, some states may have additional requirements and internship pay laws that can be even stricter. For instance, the New York State Department of Labor has even stricter wage requirements for interns. It states that employers may need to reallocate resources for productive work and assign them to interns, ensuring companies won’t profit from internships.

How Are Interns Paid?

Interns can be paid in several different ways, with the most common being hourly wages, salaries, and stipends.

An hourly wage is the most straightforward and common type of internship compensation, due to the temporary nature of the work arrangement. Interns will simply know their hourly rate and will be paid accordingly, based on the number of hours they work.

A salary is a fixed amount paid to an intern over the period of their internship, regardless of the hours they work. This method of compensation is less common among interns as their hours can vary significantly.

Finally, a stipend is another set amount that employers provide to their interns to help them offset some of their expenses. When comparing a stipend to a salary, the key difference is that a stipend is a form of support payment, whereas a salary is direct compensation for work and is typically larger.

The timing of these payments typically matches the company’s payroll cycle. Most companies follow a weekly, bi-weekly, or monthly payroll cycle, so that’s usually when interns get paid.

Regardless of the payment method or timing, interns will likely have their wages recorded on a pay stub. These documents represent detailed breakdowns of an employee’s earnings and deductions, helping them keep track of their finances and file their taxes. Plus, interns can use pay stubs to verify that they’ve been paid correctly.

Do Interns Receive Pay Stubs?

As mentioned, if an intern is receiving payments, they should also receive pay stubs. A pay stub is an important financial document for employees that shows them their gross and net pay.

While pay stubs aren’t mandated by federal law, most states require employers to issue them to employees outright, to provide them upon request, or to offer access to a digital database with pay stubs.

Pay stubs for interns usually aren’t any different from those for a regular employee. They help recipients track hours, earnings, and deductions to verify that everything is in order. For instance, since interns can get paid overtime, you can check your pay stub to see if you’ve been adequately compensated for working the additional hours.

Importance of Pay Stubs

One of the most important functions of pay stubs is to serve as a record of income. As such, they can be used in various instances, including:

• As proof of income. Pay stubs are one of the most straightforward and reliable documents to use as proof of income when applying for various types of loans (e.g., a car loan), renting an apartment, seeking financial aid, and more.

• For tax purposes. The information on a pay stub should cover an employee’s earnings, deductions, and tax withholding, helping them calculate the remaining tax liability when filing their end-of-year return.

• For record keeping. It’s good practice to use pay stubs for personal record-keeping. In addition to being useful for financial tracking, pay stubs can also provide the necessary details during potential audits or disputes.

How to Ensure You’re Getting Paid as an Intern: 3 Effective Strategies

Making sure that you’re being adequately paid as an intern requires a proactive approach and attention to detail. Here are three key strategies that can help you achieve that:

#1. Verify Your Pay Rate With Written Agreements

The first thing you should do before starting your internship is to ensure that you have a written agreement with your employer. The agreement should clearly describe your compensation and be signed by both parties to make it valid.

Some of the critical details you should look for in a written agreement include pay rate (whether an hourly rate, a monthly salary, or a stipend), your payment schedule, and the duration of your internship.

A formal written agreement obligates the employer to fulfill their end of the deal and compensate you the required amount.

#2. Keep the Records of Your Work Hours

To prevent mistakes and ensure that the employer accurately tracks your work hours, it is best to keep your own records. This includes tracking the dates you worked, the start and end times for each day, as well as any breaks you took during that time.

These records can then be compared against the employer’s data and details on your pay stubs. In case of any discrepancies (especially if you believe you’ve been paid less than what you owe), you can use personal records as proof.

#3. Verify Your Pay Stubs for Errors or Missing Information

You should carefully review each pay stub you receive to make sure that all the information on it is accurate. Check the hours worked and the pay rate, and verify that it aligns with the information from your contract and your private records.

If you find any inconsistencies or miscalculations, you should immediately contact your employer or a relevant HR or payroll department. In most cases, discrepancies are a result of human error and can be corrected quickly. The longer you wait, the more difficult it can be to rectify these issues.

Track Your Internship Income With Paystub.org

Paystub.org has a professional and easy-to-use pay stub generator that can help you create these documents in minutes.

The process is straightforward and goes as follows:

1. Pick a template and select a color.
2. Fill in the information about the payment, company, and employee or intern.
3. Complete the earnings statement.
4. Review the pay stub.
5. Download it after checking out.

Our software is ideal for small businesses looking to streamline their administrative tasks. Moreover, with built-in autocomplete features and calculators for taxes and deductions, it’s also perfect for interns who want to track their finances.

Final Thoughts

Ultimately, interns do get paid in many cases; however, unpaid internships are also legal and can provide excellent opportunities for those who want to start networking and gain real-world experience as soon as possible. Still, there are specific FLSA internship rules to make sure employees don’t take advantage of interns and profit from them without paying.

If you do secure a paid internship, make sure to get the terms in writing and to track your own hours. When you receive a pay stub, review it to ensure its accuracy, as even a simple mistake can lead to underpayment or tax issues.

Do Interns Get Paid FAQ

#1. Are stipends considered taxable income?

Yes, stipends are generally considered taxable income. While they usually aren’t subject to tax withholding, recipients still need to report them on their tax returns. There are some tax-free stipends, such as commuter benefits and education assistance, that are available under specific criteria.

#2. How do interns report income for taxes?

Interns report income using Form W-2 if they have been compensated with taxable income during paid internships. Unpaid interns who received stipends that weren’t subject to tax withholding report this income as self-employment, using Schedule C (Form 1040).

#3. Can an intern be paid in non-monetary benefits instead of cash?

If an intern is hired for a paid internship, they can’t be paid in non-monetary benefits. For-profit employers must compensate them as if they were employees. On the other hand, payment for an unpaid internship can come in the form of educational credit.